July 09, 2019:

BRITISH AIRWAYS (BA), the country’s flag carrier, used to make much in its advertising of being “the world’s favourite airline”.

That slogan, which the airline used between 1989 and 2004, trumpeted its status as the world’s largest carrier by international passenger numbers.

British Airways also claimed to provide some of the world’s best service, for instance, by introducing the world’s first fully-flat airline seats in 1995. But now it is an airline that both passengers and journalists love to hate. In recent years it has got rid of free food and drink in economy class on most short-haul flights, squeezed 20% more seats onto some of its planes and—horror of horrors—removed fresh flowers from its loos in first class.

But nothing has so exemplified the falling standards of service at BA as much as a data hack last summer in which around 500,000 people had their personal data, including their credit-card details, stolen by hackers. On July 8th the Information Commissioner’s Office (ICO), a British regulator, said it intended to fine the airline £183m ($229m) for the data breach.

This is the biggest fine ever imposed for a data breach and the first since the introduction of stricter data-privacy regulation across the European Union: the General Data Protection Regulation (GDPR). Elizabeth Denham, the Information Commissioner, responding to news of the fine, said, “People’s personal data is just that—personal.” Companies should now expect to be hit with big fines if they break the rules.

Rafi Azim-Khan, head of data privacy at Pillsbury, a law firm, warns that this will be the first of many big fines handed out to companies for data breaches. The ICO had long warned that it would start imposing much larger fines after the introduction of the GDPR rules.

The largest penalty that the ICO had ever given out—a fine of £500,000 imposed on Facebook, a social-networking giant, for its role in the Cambridge Analytica data-harvesting scandal—was the maximum allowed under the previous set of data-protection rules.

The ICO is now allowed to give fines of up to 4% of a company’s annual turnover. BA’s was levied at 1.5% of its turnover in 2017, the financial year before the breach. Regulators in France, Germany and Ireland are already snooping around the affairs of several technology giants and say that they are not afraid to use their new powers to the full.

But what really angered those who had their data stolen was the reaction of the management of IAG, the group that owns British Airways, which has refused to take unconditional responsibility for the breach. In a statement Alex Cruz, the boss of BA, said, “We are surprised and disappointed in this initial finding from the ICO.”

Meanwhile Willie Walsh, chief executive of IAG, was quoted saying, “We intend to take all appropriate steps to defend the airline’s position vigorously, including making any necessary appeals.” Although IAG apologised to its customers for any “inconvenience” caused, it sought to blame unspecified criminals for the hack. And that is exactly why the ICO has been given the power to give out such huge fines: to force companies to take action to prevent hacks from happening, rather than simply passing the buck when they do.

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